After a sharp falloff in 2010, investments in the UK’s clean energy sector rebounded in 2011 to $9.4 billion – a 35 percent increase and the seventh highest among G-20 nations, according to new research by The Pew Charitable Trusts. The growth was driven in part by a 10-fold increase in solar energy investments, which rose to $4.8 billion, financing the installation of more than 300 megawatts (MW) of power in 2011. Sustained interest in development of offshore wind turbines also helped to spur $2.3 billion worth of investment and 900 MW of capacity in the wind sector. To date, the UK has installed 6.4 GW of wind capacity.

“While solar investment saw the most significant growth in the UK, offshore wind is poised for significant future investments and capacity additions,” says Phyllis Cuttino, director of Pew’s Clean Energy Program. “In part, investment growth in the United Kingdom can be attributed to investors initiating new projects before policy incentives are curtailed. To maintain growth, the UK must provide consistent, long-term market signals that provide certainty to investors.”

Globally, investment grew to a record $263 billion in 2011, a 6.5 percent increase over the previous year. The United States reclaimed the top spot among all G-20 nations and attracted $48 billion. However, with $45.5 billion in private investments, China continued to be a hub of clean energy activity – leading the world in wind energy investment and deployment, as well as wind and solar manufacturing. Germany received $30.6 billion, ranking third among G-20 nations. The combination of falling prices and growing investments accelerated installation of clean energy generating capacity by a record 83.5 GW in 2011 bringing the total to 565 GW globally. This represents nearly 50 percent more than installed nuclear power capacity worldwide by the end of the year.

“The clean energy sector received its trillionth dollar of private investment just before the end of 2011, demonstrating significant growth over the past eight years,” points out Michael Liebreich, chief executive of Bloomberg New Energy Finance, Pew’s research partner. “Solar installations drove most of the activity last year as the falling price of photovoltaic modules, now 75 percent lower than three years ago, more than compensated for weakening clean energy support mechanisms in a number of parts of the world.”

The UK Environment Agency has warned that the drought in England could last beyond Christmas. Seventeen counties in South West England and the Midlands have now moved into official drought status, after two dry winters have left rivers and ground waters depleted.

While public water supplies in these areas are unlikely to be affected, the lack of rain is taking its toll on the environment and farmers – causing problems for wildlife, wetlands and crop production. The Environment Agency is urging businesses, water companies and consumers to all play their part by using water wisely, to help conserve precious water supplies.

In the Midlands the Environment Agency has rescued fish from the River Lathkill in Derbyshire after it dried up, and the Rivers Tern, Sow, Soar and Leadon reached their lowest ever recorded levels in March. In the South West rivers are also suffering and nationally important chalk streams, such as the Hampshire Avon and the Dorset Stour, which support rare trout and salmon species, are exceptionally low.

While rain over the spring and summer will help to water crops and gardens, it is unlikely to improve the underlying drought situation. It was hoped that a prolonged period of rainfall between October and March – known as the winter recharge period – would prevent widespread drought, but parts of England received less than 60 per cent of the average winter rainfall, and water supplies have not been replenished.

Experts are now hoping for a steady rainy winter in 2012/13 to restore rivers and groundwaters, but the Environment Agency is working with the water industry to put plans in place now to deal with the prospect of a third dry winter. Water companies are looking at where they may be able to get more water, options to share water across company boundaries and how they can reduce leakage further. The Agency is urging all water users to save water now, to help prevent more serious shortages and environmental impacts next year.

Trevor Bishop, head of water resources at the Environment Agency, says: “A longer term drought, lasting until Christmas and perhaps beyond, now looks more likely – and we are working with businesses, farmers and water companies to plan ahead to meet the challenges of a continued drought.”

Green Energy

The latest Retail Marketing Survey, conducted by the Energy Institute (EI), shows that the number of forecourts in the UK continued to decline over the past year, falling to just 8,480 sites – down from 8,892 outlets in 2010. This is compared to 1967′s all-time high of 39,958 forecourts.

Oil company sites decreased by 209 to 5,310 in 2011, while the main retailer sites increased by 15 to 906 and supermarket sites increased by 27 to 1,316. Smaller retailer sites decreased by 8 to 63 and other unbranded sites decreased by 41 to 885.

The five largest oil company operations by number of branded forecourts were: BP with 1,178 sites (up 4 in 2011); Esso with 890 (down 34); Shell with 845 (down 41); Texaco with 840 sites (down 57) and Total with 782 (down 51).

Other key findings of the survey show:

* Petrol sales totalled 13.86mn tonnes by year-end – down from 15.01mn tonnes at the close of 2010.

* Diesel sales totalled 13.91mn tonnes by year-end – rising slightly from 13.06mn tonnes a year earlier.

* Total 2011 road fuel sales fell slightly to 35.608mn tonnes – down from 36.111mn tonnes in 2010.

* By the close of 2011, unleaded prices had averaged 133.60 p/l (versus 117.16 p/l in 2010); while diesel prices closed the year at an average price of 138.90 p/l (versus 119.51 p/l).

* Registered UK vehicles rose from 34.1mn in 2010 to reach 34.7mn by end-2011, with each forecourt supplying an average of 4,088 vehicles.

Fears over safety and growing instability in the fuel industry are pushing oil tanker drivers closer to national strike action warns Unite, Britain’s largest trade union. Voting will begin next week in a strike ballot of over 2,000 drivers who work for seven major fuel distribution firms. The ballot will embrace approximately ninety per cent of drivers supplying petrol to UK forecourts.

The firms deliver fuel for around 11 oil companies supplying forecourts across the UK. Strike action could hit the petrol pumps of household names such Sainsburys, Tesco, Asda, BP, Esso and Shell, as well as airports.

Unite makes clear that the vote is not about pay but is about establishing a forum to agree industry-wide best practice on safety, training and terms and conditions in order to stabilise a nationally vital industry. According to Unite, the union’s attempts to progress the forum have been thwarted by employers’ unrelenting attacks on drivers’ terms and conditions.

Over the next two days the union will be serving notice of the ballot for strike action on seven major distribution companies, Wincanton, DHL, Hoyer, BP, JW Suckling, Norbert Dentressangle and Turners.

Matt Draper, Unite national officer, says: “This is not about pay – this is about ensuring that high safety and training standards are maintained so that our communities are safe. It is about a simple measure, the creation of an industry-wide bargaining forum. It is about bringing fairness and stability back to an industry that is now controlled by faceless global giants.”

The Energy Innovation Centre has revealed access to £29.2 million of funding for innovators and companies looking to bring new ideas for tomorrow’s energy industry to market. Available from February 2012, the funding can be accessed via the Energy Innovation Centre and investments will be selected by five of the UK’s leading electricity distribution companies – Electricity North West, Northern Power Grid, ScottishPower Energy Networks, Scottish and Southern Energy and UK Power Networks. These major players are looking to implement new services and technologies to enhance the way power is transported, monitored and stored.

The funding available originates from Ofgem’s Innovation Funding Incentive scheme and the £500m Low Carbon Networks (LCN) Fund.

“This is another huge step forward for innovators and businesses that need to accelerate their ideas to market. As part of this initiative we will continue to deliver a range of support services, including opportunities to test technologies on high and low voltage power networks and establish relationships with potential customers,” comments Denise Massey, director of the Energy Innovation Centre. “This is an opportunity for the UK to further develop the way energy is distributed whether this is a new or early stage idea or an existing technology from another industry which will improve the energy supply process. We are looking for products that will help manage demand, and encourage more efficient use of energy in the home and workplace.”

The UK power industries operate power networks with a replacement value of £150 billion and invest £1.5 billion per annum on maintaining and growing their 500,000 miles of cable which deliver electricity to homes.

Mark Mathieson, managing director of networks at Scottish and Southern Energy, says: “The low carbon agenda will change the way we buy and procure energy from the model we’re used to. Not a lot has changed since the 1930s but we as we move towards the likes of wind generation, electric cars, PV systems we’re looking at a more intermittent and complex mix of energy generation and use. The flows of energy will be completely different to what we’re used to and we need to manage the new constraints. Fault detection and resolution will also become increasingly complex.”

Since its launch in 2008 the Cheshire-based Energy Innovation Centre has provided business support to over 140 SMEs, start-ups and inventors from the UK and internationally. The Centre offers a complete range of services including product development, funding assistance, business support and access to power experts, and is committed to turning energy saving ideas into commercial reality.

For more information about the funding available and to see a list of industry technology gaps call 0151 347 2433 or visit www.energyinnovationcentre.com.

CAPTION:

Pictured (left to right): Chris Goodhand, innovation manager of CE Electric; Mike Kay, director of engineering and planning of Electricity North West; Stewart Reid, future networks and policy manager of Scottish and Southern Energy (SSE); and Denise Massey, director of the Energy Innovation Centre.

Spending by large UK firms on energy, environment and sustainability initiatives will grow at an average of 16% a year between 2012 and 2015, according to a new market forecast from independent analyst firm Verdantix. The growth in sustainable business spending in 2012 will be 12% which is twenty times faster than the forecasted growth of the UK economy at 0.6%. The study finds that spending by 421 firms in the UK with revenues greater than £750 million will grow from £4.3 billion in 2012 to £6.8 billion in 2015. With current GDP assumptions, annual growth rates will accelerate from 15% in 2013 to 17% in both 2014 and 2015.

“Despite the sluggish economy, spending by large firms in the UK on energy, environment and sustainability initiatives is set to increase by 12% in 2012. By contrast the UK economy is only expected to grow by a paltry 0.6% in 2012,” comments Susan Clarke, Verdantix analyst and author of the report. “The UK’s sustainable business market is continuing to grow at a healthy rate because firms have aligned sustainability strategies with operational efficiency. Energy cost savings and more efficient use of natural resources now underpin sustainability investments – not philanthropic commitments to fight climate change.”

The Verdantix study, UK Sustainable Business Spending 2010-15, finds that three value chains account for three-quarters of the entire UK market. In 2012, retail and consumer brands will account for 34% of total spend representing £1.5 billion. The emissions intensive sectors – oil and gas, transport and utilities – will spend £1.1 billion on sustainable business initiatives representing 25% of the 2012 market. Technology, telecoms and high-tech engineering firms will represent a further 18% of the market in 2012, reaching £792 million. Over the 2010 to 2015 period, compound annual growth rates will vary between 17% for sectors at the top end like automotive, telecoms and utilities, and 9% at the bottom end in the chemicals and pharmaceuticals sectors.

Industry growth rates diverge over the 2010-15 period because each industry is impacted differently by four market drivers. 1) The relative maturity of organizational structures designed to deliver sustainability strategies, for instance, the presence of a Chief Sustainability Officer. 2) The scope to generate revenues in markets for on-site renewable energy, energy efficiency, green building materials, environmental product stewardship and sustainable waste management. 3) The impact on business operations of policies for energy efficiency, renewable energy and carbon management. 4) The potential to differentiate on sustainability, which is significant in sectors like grocery retail, data centre services and consumer products but not in industrial sectors.

In the context of the 16% compound annual growth rate, some initiatives will experience significant growth and others will barely keep pace with inflation. Fast growing areas of spend between 2010 and 2015 are smart meters (23%), electric vehicles (22%), on-site renewable energy (22%), product stewardship (21%) and sustainable solution marketing (21%). Initiatives which will experience slower growth rates are: spending on social responsibility (5%), employee engagement (5%), environment, health and safety (6%), regulatory affairs and lobbying (6%). Taken as a whole, strategic energy management will be the largest area of spend in sustainable business budgets.

The UK is set to be amongst the best prepared nations for the implications of climate change following publication of a groundbreaking study into the threats the country faces. The Climate Change Risk Assessment (CCRA) highlights the top 100 challenges to the UK and its economy of a changing climate and provides the most compelling evidence yet of the need to increase its resilience. The research confirms the UK as a world-leader in understanding climate risk to ensure it can make robust plans to deal with these threats.

In order to provide a reliable baseline for decisions by Government, local authorities and businesses the research does not take into account any future policies or plans. However, a Government report published alongside the CCRA does highlight the many current and future policies already in place and gives details of plans which will address some of the risks identified.

The Government has also announced a National Adaption Programme that will prepare the UK for the effects of climate change, including the risks set out in the CCRA. Among the key risks the CCRA identifies, in the unlikely event the UK took no further action, are:

* Hotter summers present significant health risks. The CCRA projects that without measures to reduce the risk, there could be between 580-5,900 additional premature deaths per year by the 2050s. The Department for Health launched a Heatwave Plan in 2004 and updates it annually to provide advice and support for people vulnerable to hotter weather.

* Increasing pressure on the UK’s water resources. The CCRA projects that without action to improve water resources, there could be major supply shortages by the 2050s in parts of the north, south and east of England with the greatest challenge in the Thames River basin.

* The risks of flooding are projected to increase significantly across the UK. New analysis for England and Wales show that if no further plans were made to adapt to changing flood risks, by the 2080s due the effects of climate change and population growth annual damages to buildings and property could reach between £2.1billion and £12 billion, compared to current costs of £1.2 billion.

* The number of days in an average year when temperatures rise above 26 degrees C is projected to rise from 18 days to between 27-121 days in London by the 2080s. This could mean greater demand for energy to cool buildings and more heat related illnesses.

* Increases in drought and some pest and diseases could reduce timber yields and quality. Projected drought conditions could mean a drop in timber yields of between 10% and 25% by the 2080s in the south east, driving up timber costs. Pests and diseases, which thrive in warmer conditions, may also pose an increasing threat, such as red band needle blight – which causes loss of foliage and can lead to tree death.

The CCRA also highlights opportunities for the UK that climate change could present, including:

* Opening of Arctic shipping routes. The melting of Arctic sea ice could lead to the opening up of new container shipping routes and improved trade links with Asia and the Pacific.

* Milder winters may result in a major reduction in cold-related deaths and illnesses. Currently, cold weather results in between 26,000 and 57,000 premature deaths each year in the UK. By the 2050s, a reduction in these figures of between 3,900 and 24,000 is projected to occur due to increasing average winter temperatures. This would particularly benefit vulnerable groups, including those with existing health problems.

* Opportunities to improve sustainable food production. Sugar beet yields are projected to increase by 20-70% and wheat yields by 40-140% by the 2050s due to longer growing seasons if water and nutrients remain available. A warmer climate presents opportunities to grow new crops such as soya, sunflowers, peaches, apricots and grapes, while new markets may open up overseas for British grown produce.

The CCRA evidence will be used to develop a National Adaptation Programme (NAP) that will set out timescales for the actions Government will take to meet the challenges of climate change.

The European Commission considers that Ireland and the United Kingdom are not fully in line with EU gas market rules and has decided to refer these countries to the Court of Justice of the European Union. The best way for ensuring security of supply and affordable energy prices is to have a competitive internal EU energy market. An efficient and properly functioning internal market in natural gas will give consumers the choice between different companies across national borders. EU legislation aims at facilitating cross-border gas trade and increasing the capacity on gas markets.

According to EU gas rules, the maximum interconnection capacity between Member States and between different gas transmission systems must be offered to the market so that consumers can fully benefit from competition on the market. Only when interruptible reverse flow capacity and short-term services (short term contracts to book gas capacity) are offered, can pipelines be used to their maximum capacity. This means that more gas can be transported and new companies can enter the market. This will give consumers the possibility to choose between different companies and services.

The maximum interconnection capacity is not offered in the UK and Ireland as the pipeline connecting Northern Ireland and Ireland is not open to the market. This means that gas companies in Ireland cannot directly trade gas with Northern Ireland or vice versa. On the pipeline connecting Scotland to Northern Ireland short-term services are not available and neither is virtual reverse flow capacity based on netting off physical forward flow to make capacity available for commercial trade as required by EU longstanding legislation.

The Commission is aware that the UK and Irish governments intend to introduce Common Arrangements for Gas (CAG) between Ireland and Northern Ireland. While the Commission welcomes such steps to create cross-border market, this project has already been delayed. Therefore the Commission has decided to proceed with these infringement procedures in accordance with the EU law.

The UK wind sector has reached a landmark 6 gigawatts of installed capacity – enough to supply electricity to 3,354,893 homes – according to RenewableUK, the trade association representing the renewable energy industries. The 6GW threshold was reached by the Ormonde offshore wind farm, off the coast of Cumbria, which now has 120 megawatts (MW) operational – enough to power more than 67,000 homes.

“There’s a great feeling of pride throughout the industry that we’ve reached a record high of 6 gigawatts, and there’s a further 19.5GW of capacity under construction, consented, or in planning,” comments Maria McCaffery, chief executive of RenewableUK. “The Government’s Renewable Energy Roadmap is calling for 31GW of onshore and offshore wind combined by 2020, and we’re confident that we can deliver this if we continue to get the right level of Government support.”

CAPTION:

Turbine installation at the Ormonde Offshore Wind Farm.

EDF Energy has announced it will cut gas prices by 5%, making it the first major energy supplier to lower prices this year. The move, effective from 7 February, follows in the footsteps of smaller energy firms Co-operative Energy and Ovo Energy, who have already announced price decreases.

The price cut will be on gas, and not electricity. EDF Energy was the last of the major energy companies to raise its prices after it upped gas by 15% and electricity by 4.5% in November.

Which? executive director Richard Lloyd says: “This gas price cut will be welcome news for millions of consumers with already squeezed household budgets. But it follows a hike of 15% last November. Now the pressure is on for the rest of the major suppliers to follow suit. But as our survey today shows, there remain huge problems with customer service in energy as well as high prices.”

Wind power supplied an average of 5.3% of the UK’s demand for electricity for December and early January, reaching a record share of 12.2% on 28th December. As a result, carbon emissions from the UK’s electricity generators were cut by over 750,000 tonnes, equivalent to taking over 300,000 cars off the road.

Dr Gordon Edge, director of policy at RenewableUK, the trade association for the wind, wave & tidal industry, comments “Wind energy represents a new paradigm in electricity generation, allowing us to harness the power of the weather when it’s available, cutting our fossil fuel bills and lowering our carbon emissions. As we’re generating increasingly large amounts of electricity from wind, feeding those large volumes of power into the system represents an engineering challenge to the National Grid – a challenge we are pleased to see they met over Christmas.”

National Grid is responsible for balancing the output of the UK’s electricity generators with demand from consumers and businesses on a minute by minute basis. Integrating the variable output of wind generators involves taking a range of balancing actions, including reducing the rate at which fossil fuel generators consume fuel when wind output is higher. Last year, National Grid launched a new wind power forecasting system, allowing their engineers to more accurately predict output from the UK’s growing fleet of wind farms.

Safety reassessments undertaken at UK nuclear power stations in the light of events at Fukushima Dai-ichi have revealed no fundamental weaknesses. A report just published by the Office for Nuclear Regulation, the UK’s independent nuclear safety regulator, confirms that UK sites have identified and made improvements to enhance safety by learning from events in Japan.

The findings are contained in the UK national ‘stress test’ report submitted to the European Council. It requested a targeted reassessment of safety at all European nuclear power plants based on the circumstances which occurred at Fukushima: extreme natural events challenging the plant safety functions and leading to a severe accident.

Licensees of the 33 operating or shutdown reactors in the UK within scope of the report have carried out the tests and the Office for Nuclear Regulation has reviewed the results. The UK has 18 operating nuclear reactors and 15 ‘shutdown’ reactors which fall within the scope of the European stress tests.

John Donald, a senior nuclear safety inspector at the Office for Nuclear Regulation, comments: “Fukushima provided the world a unique opportunity to learn from a serious nuclear accident. No matter how high our standards of safety, the quest for improvement must never stop. Work is already under way to improve safety at UK sites, such as bolstering flood defences and enhancing coolant supplies. We have also asked licensees of UK nuclear power stations to consider resilience against events that have only remote chances of happening in the UK.”